PCs have faced a cautious market this past year or so, with the rise of tablets but also because of our very globalized market.   Market research firm IHS predicts the PC industry will shortfall in shipments in the near future, an unsettling thought for manufacturers that derive parts from overseas.  According to IHS, because of the tsunami in Thailand, the multiple disk factories and their suppliers have been hit hard.  The result in a sluggish outlook for the PC industry in first half of 2012.

This not only affects the first quarter of 2012, but also the outlook for the entire year. As IHS notes, the global PC shipment is now expected to increase by only 6.8 percent, compared to 9.5 percent growth predicted in August.  Partly due to HDD shortage, PC sales in 2012 are forecast to amount to $376 million compared to previous estimation of $399 million.

The market research firm estimates the global PC shipment in the first quarter of 2012 would be around 84.2 million units, lower than the earlier estimate of 88 million.  The number of emergency orders for solid state drives (SSD) rose sharply last month in the wake of massive floods in Thailand, resulting in a severe shortage of hard disk.

“The PC supply chain says it has sufficient HDD inventory for the fourth quarter of 2011. However, those stockpiles will run out in the first quarter of 2012, impacting PC production during that period,” said Matthew Wilkins, senior principal analyst, compute platforms for IHS.

While some PC makers are relatively optimistic that the hard disk shortage in the first quarter of 2012 will remain flat, others are hopeful about increase in production in the second quarter of next year.  With an increase in HDDs delivery, we can expect improvement in the situation from the first quarter of 2012.

The situation highlights the fragility and the opportunity of our global market.  Just last month Dell reported forecasting revenue at the lower end of its outlook for 1% to 5% growth for the fiscal year mainly due to industry-wide hard drive issue caused by disruptions due to the flooding in Thailand. Japanese electronics maker Sony is expecting TV losses to be 175 billion yen ($2.2 billion) this financial year due to Japan’s earthquake and the resulting tsunami that shut down production at 10 factories in March.

Thailand accounts for up to 45 percent of global production of hard drives, and the floods have damaged tens of disk factories. Thailand is the world’s second largest exporter of hard drives after China and the severe flooding has hit hard the production of large companies like Seagate and Western Digital. The scarcity of hard disk components could result in 10 percent fewer PC deliveries in the fourth quarter of this year, compared to previous forecasts.

PC prices may also increase as a result of the lengthy consequences of natural disasters like floods, earthquakes, and hurricanes.  The hard drives are about 7 to 10 percent of the total production cost of a PC, and can thus affect the overall price of a machine.  PC manufacturers have previously had to cope with shortages of components, but a shortage of hard drives is a major challenge for the entire industry.  The HDD market is so consolidated in Thailand that the flood will likely have long term implications for the global PC shipments.